Two men who allegedly stole a dog and demanded a ransom for it have been arrested in Sydney’s west after arranging a rendezvous with the owner.

The owner, a 21-year-old woman, told police patrolling in Cabramatta on Monday afternoon that her Labrador-Staffordshire cross had been taken from the backyard of her Bonnyrigg home.

She said she had received a phone call giving her a Cabramatta location and telling her her dog Lily would be returned in exchange for a payment.

The officers later approached a car in which two men were waiting at the designated spot and found the dog, suspected stolen goods and a balaclava.

A 25-year-old man has been charged with stealing a dog, corruptly taking a reward for a stolen dog, drug possession, goods in custody and having a knife.

The second man, also 25, faces the same dog-related charges as well as driving while disqualified and breaching bail.

Both have been refused bail and will appear in Liverpool Local Court on Tuesday.